Amato calls for action to combat moral crisis

TIME was running out for the Italian government to restore the public's confidence that the country would pull out of its economic and moral crisis, the Prime Minister, Giuliano Amato, warned parliament yesterday.

'Disquiet is spreading fast,' he said. It was damaging business and competitiveness; drastic action was needed to tackle the moral crisis created by the revelations of widespread political corruption and wider backing was needed in parliament for solutions to other urgent problems facing the country, Mr Amato said.

The embattled Prime Minister, looking weary, was opening a debate on Sunday's controversial cabinet reshuffle which should end today with a confidence vote, the eleventh in his eight months in power. 'These are, or may prove to be, the most dramatic and difficult days of our Republic and for the salvation of its democratic institutions' he said. 'Everyone must face up to his responsibilities. I and the government first of all. I do not intend to shirk this and it is my duty to carry on.'

Fears that he might not survive the vote subsided yesterday after Socialist and Christian Democrat leaders appeared to have quelled rebelliousness in their ranks. But truculent remarks by a leading rebel later indicated that there might still be trouble ahead.

The bone of contention is Mr Amato's decision to take responsibility for privatisations away from the Industry Minister, Giuseppe Guarino, a Christian Democrat, who was at odds with the rest of the government over privatisation policy but who refused to give up the job.

The government's policy 'has been put in jeopardy by the Industry Minister,' said Mr Amato. He conceded that the solution he chose was not ideal but emphasised that it was 'essential' to its programme. This appeared to be a warning that if he did not get his way he might give up.

But Paolo Cirino Pomicino, a Christian Democrat, a former budget minister and the most outspoken opponent of the move, retorted that 'it is natural that Amato should insist but we will amend this decree'.

The lira continued to plunge yesterday, hitting a record low against the German mark. It was rumoured that the Bank of Italy intervened to prop up the lira for the first time since last year's European Monetary System crisis.

The prospect of a round of key referendums within the next two months grew as the Prime Minister declared that he was in favour of holding them at the end of April. The most important of the referendums, which will all be held on the same day, is one which demands a majority electoral system to replace Italy's disastrous proportional one.

This referendum, which appears likely to succeed, would compel parliament to draw up a new majority electoral law - either on British, or, more likely, French lines - which would transform the discredited face of Italian politics. A joint committee of senators and deputies appointed to reform the electoral law has so far failed to produce any results.

In Milan, the former justice minister, Claudio Martelli, who quit two weeks ago after being told that he was under investigation in the political bribery scandal, yesterday submitted himself for questioning by magistrates. Judicial sources said the magistrates asked Mr Martelli about a bank account which the Socialist Party was alleged to have kept in Switzerland to accept unofficial contributions to the party. Dozens of politicians and businessmen have been arrested in the year-long investigation into kickbacks accepted by Italy's biggest political parties in return for awarding public-works contracts.

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